Google’s NFC plan: data sharing, targeted ads, and discounts

"Hello Jacqui! I see you buy vodka regularly—would you like a 50 percent off coupon on some cranberry juice to go with it?"

Google hopes to give retailers access to more in-depth customer data as part of its push to bring Near Field Communications (NFC) into the mainstream. The plan is apparently part of Google's underground NFC tests being carried out in New York and San Francisco. Google's testing is still said to be in its early stages, but it may roll out NFC to the public later in 2011.

NFC is an evolution of the RFID technology employed in "contact-less" payment systems such as MasterCard PayPass and Visa payWave, and is mostly known in the US as a means of enabling wireless payments at retail stores. (Check out our NFC technology primer for more details on how it works.) That's not all NFC can be used for, though—it can also keep track of gift card and ticketing balances, as well as personal information and consumer preferences.

According to sources speaking to the Wall Street Journal, Google's NFC push won't just be about sharing consumer data. Retailers will also be able to use that data in order to send better targeted ads to users, and they'll be able to offer discounts to nearby mobile users. Citigroup and MasterCard have reportedly teamed up with Google already to use its NFC system.

VeriFone is reportedly providing the contactless phone readers for use with Google's NFC system, too. Google was said to be installing "thousands" of these readers at merchants in New York and San Francisco earlier this month, though neither company commented publicly on the test.

According to the WSJ's sources, Google is facilitating this entire rollout without asking for a cut of transaction fees. So what's in it for Google? For one, Google has been working for years on beefing up its ads on mobile devices, so it's likely more interested in the targeted ad element than anything else. Last year, Google was said to be giving its carrier and handset partners a cut of its mobile ad revenue, so everyone involved has a vested interest in growing the user base of people who can received targeted ads.

Apple's implementation may go beyond mobile payments and targeted ads, though; the latest rumors claim that Apple will use NFC to enable iPhones to function as a secure mobile user account for use with any Mac. Still, given the fact that Google is already signing on payment partners, it appears Google may be further along in its plans than Apple—we wouldn't be surprised to see Google take the lead on this one, with Apple following up later in the year or in 2012 with its own NFC solution.